Looking for information In England regarding debt solution for my unsecured loan

[Gohar]

Hi All, I am looking for information In England regarding debt solution for my unsecured loan (£53,000). II am also thinking to declare bankruptcy ? Personal Info: I am living on rented property. I have no assets. I have car on finance (Bal left £6,750). Two kids (Boy -4 years, Girl:8 Year) and kids are living with their mum in council property. I am 40 years old. I am not sure which direction I need to go. I have been paying this loan since 2014 but I am unable to keep it up due cost of living. I am not sure which direction I need to go. should I go for IVA or Bankruptcy?
Please Advise.
Regards YG

 

[WaveJumper]

Personally I think you best options here are to seek some proper debt advice from the various bodies around which specialise in helping those who find themselves in similar situations. Have a scroll through the attached for some useful contacts:

Get free debt advice

Get free, confidential and independent advice on dealing with debt problems across the UK - telephone, fax, opening hours, website

www.gov.uk

 

[japancool]

My take on this:

An IVA is only really appropriate if you have assets to protect, such as property. As the debts amount to over £30,000, you don't qualify for a debt relief order.

You CAN declare bankruptcy. This will place you under restrictions for a year, as well as significantly affect your credit rating. You will not be able to run a company for the period you are undischarged. If you have leftover money after your monthly expenses, you may be subject to a payments agreement.

If you are able to raise a lump sum, try to negotiate with your lender and offer them a sensible sum as full and final settlement.

Otherwise, speak to one of the many IPs on this forum.

 

[Gyumri]

Hello Gohar I wouldn't declare bankruptcy as that won't solve anything. If you have no assets then it is your lender who needs to worry if you can't keep up with the payments.

I would inform the lender that you are not able to make any further payments or alternatively come to an arrangement to make smaller repayments if you can afford to do so.

There is no point in running yourself in the ground. If the lender wants to apply to make you bankrupt he would first have to serve a statutory demand on you before being able to take the next steps of applying to make you bankrupt.

All that could take about a year to conclude and by that time you may be in a stronger position to offer say a payment of £5,000 to settle the debt.

For a private lender some loaf is better than no loaf at all.

 

[Mark T Jones]

Talk to the CAB and talk to the lender

If you haven't done so, draw a comprehensive statement of income and outgoings.

In most cases lenders will favour a scheduled payment rather than formal insolvency (though they will probably play hardball at first)

 

[Byzantium]

Debts get traded and at the end of the line will be people paying less than 5p in the £1 for your debt and they might well accept a token amount to clear the books.

However, if this come to pass, ensure that it is recorded as paid in full, not part paid and written off.

 

[Byzantium]

Have a look here: https://all-about-debt.co.uk/

 

[Lisa Thomas]

An IVA does not sound viable in the circumstances you have described as it des not sound like you have any assets, or income, to introduce into an IVA.

Please do not take bankruptcy advice form anyone who is not registered with the FCA to give Bankruptcy advice.

I highly recommend you speak to a charity, like Stepchange who can give you free advice.

StepChange Debt Charity. Free Expert Debt Help & Advice

 

[Lisa Thomas]

Hello Gohar I wouldn't declare bankruptcy as that won't solve anything. If you have no assets then it is your lender who needs to worry if you can't keep up with the payments.

I would inform the lender that you are not able to make any further payments or alternatively come to an arrangement to make smaller repayments if you can afford to do so.

There is no point in running yourself in the ground. If the lender wants to apply to make you bankrupt he would first have to serve a statutory demand on you before being able to take the next steps of applying to make you bankrupt.

All that could take about a year to conclude and by that time you may be in a stronger position to offer say a payment of £5,000 to settle the debt.

For a private lender some loaf is better than no loaf at all.

It would wipe the debt.

 

[Gyumri]

It would wipe the debt.

It certainly would but at the cost of £680 to the OP, which she can do online from the comfort of her armchair.

The lender could also put her out of her misery by bankrupting her, which might take a year and would cost the lender £1,802.

If the OP really has reached the end of the road financially then I would let the lender do the spade work at their expense because it might be that in a year's time the OP's fortunes might have improved.

There is always the mental health debt moratorium that the OP can apply for to give temporary relief.

Debt Respite Scheme (Breathing Space) guidance for creditors

www.gov.uk

 

[Lisa Thomas]

There is no guarantee the creditor will issue the petition, or when. Especially if there are no assets that would lead to a) their petition costs being repaid and b) a dividend towards the unsecured debt.

£680 to wipe out over £50k of debt is a fair swap imo.

 

[japancool]

Regardless, I definitely second the advice to speak to StepChange.